THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:30:03]

JAKE TAPPER, CNN HOST: Jim, thanks so much for joining us.

I want to read you this tweet from President Trump and ask you what you think.

He wrote, "When you're already $500 billion down, you can't lose."

As an economics journalist, what is your take on that?

JIM TANKERSLEY, "THE NEW YORK TIMES": I think, as an economics journalist, my take would be that both parts of that tweet are debatable.

First off, $500 billion down doesn't -- just because you have a trade deficit, which, by the way, isn't $500 billion with China, just because you have a trade deficit doesn't mean you're down. You get something for that money.

But, also, certainly a trade deficit can get wider. There are all sorts of things you can do. And, in fact, if you just cut off trade between countries, you absolutely can lose because you can make things more expensive for your own people and cut off markets for your own businesses, which is the big fear here, that somehow this will escalate into the sort of trade war that raises prices and cuts off market access and everybody loses, the Chinese and the Americans.

TAPPER: It's not a good philosophy for trade or if you go to the Trump Casino, for example, in Atlantic City. I guess it doesn't exist anymore, though.

But, Jim, I want to ask you. China responding with plans to impose equal tariffs on U.S. goods, primarily targeting America's heartland, the real danger -- of course, nobody has actually imposed any of these tariffs -- the real danger is this could escalate and somebody actually will pull a trigger.

TANKERSLEY: Right.

And so I think that's what we saw Larry and others trying to say today is, hey, this could be a negotiating tactic. Might not be. There is a lot of effort to push Sarah Sanders to pin that down in the briefing today and she didn't really say whether they actually planned to carry these out. But if they do, then the worry is that it is not just these $50

billion worth of goods to start, but that the countries will start going back and forth. China will escalate its tariffs. We would escalate our tariffs. And eventually you're in a place where pretty much everything exchanged between the countries is subject to a tax, which would again slow trade down between two enormous economies in the world.

TAPPER: Symone, I want to ask you.

Last fall, President Trump tweeting multiple times, taking credit for a rise in the stock market. "Businesses looking better than ever with business enthusiasm at record levels. Stock market at an all-time high. That doesn't just happen."

The problem is, as was pointed out at the time...

(CROSSTALK)

SYMONE SANDERS, CNN POLITICAL COMMENTATOR: You live by the stock market, you die by the stock market.

Look, as someone who helped write the talking points for the progressive trade movement, Jake, I understand actually what the White House thought they were trying to do. These were career officials that issued a report that happened over a year that resulted in these tariffs.

The algorithms are actually really smart. The issue is, the White House and the administration did not account for retaliation. The White House and the administration did not account for their botched rollout that would cause the Chinese to react in the way that they reacted.

Look, Donald Trump has said that he wants to stay on the side of the American worker. It is sad that both Democratic and Republican presidents have failed to hold China accountable. But I don't think the Trump administration has gotten to the root of this issue.

And it's backfiring on them. They are hurting folks and they're not standing on the side of the American worker with this tariff issue right now.

TAPPER: All right, everyone, thanks so much.

Stick around.

Jim Tankersley, thanks for joining us as well.

Could police have stopped the YouTube gunwoman before she went on her rampage? What the family told officers hours before the shooting began. That's next.

Stay with us.

(COMMERCIAL BREAK) [16:37:27]

TAPPER: Today's national lead, did police miss repeated warning signs that might have prevented the shooter yesterday at YouTube headquarters in San Bruno, California?

The shooter, police say, Nasim Aghdam, killed herself after shooting a man still in the hospital and two women.

But the day before, her family had reported her missing from her San Diego home. Police found her the next day. That's yesterday, the same day as the shooting, almost 500 miles away from her home in Mountain View, California, not far from YouTube headquarters where just hours later she would walk into YouTube and wreak havoc.

CNN's Kyung Lah joins me now nearby in Mountain View, California.

And, Kyung, before the shooting, the shooter's family says they warned police that she could be headed to YouTube, a company that she had expressed hatred towards online. How are police explaining not taking her into custody?

KYUNG LAH, CNN CORRESPONDENT: Let's walk through that police contact.

That first contact that you were talking about between Mountain View police and the shooter, it happened 11 hours before the YouTube shooting. They found her sleeping in her car in a retail parking lot.

They ran the plates. They discovered that there was a missing persons report for her out of San Diego. Two police officers spoke with her. They spoke with her for 20 minutes.

And out of that conversation, they deemed she was not a threat. She did not mention YouTube. The police officers then called her family. They spoke with the family twice. And it was in that second phone call that the family mentioned this beef with YouTube.

But here's what the police here say they did not mention, any sort of urgency, weapons or violent history. That is why the Mountain View police did not pass on this information to the San Bruno Police Department or YouTube.

(BEGIN VIDEO CLIP)

MAX BOSEL, MOUNTAIN VIEW, CALIFORNIA, POLICE CHIEF: You can imagine the number of folks who have disputes with various social media companies, the amount of folks who we see in this general area.

There was nothing by her body language, her conversation, her demeanor or the information that we received from the family that suggested that we should handle this in any other manner in which the officers handled it.

(END VIDEO CLIP)

LAH: Now, the shooter's family says all of this is very upsetting. They believe that more should have been done.

A woman who would not give us her name or identify herself, but said that she was a member of the family, spoke with CNN's Miguel Marquez just outside San Diego.

Here's what she said:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They said she was angry at YouTube, so be careful. And police said, we're going to watch her.

But they didn't watch her.

QUESTION: Are you guys angry with police?

UNIDENTIFIED FEMALE: I don't know.

[16:40:00]

QUESTION: Do you blame the police? Do you -- should they have done more?

UNIDENTIFIED FEMALE: They should watch, but that is not...

(CROSSTALK)

UNIDENTIFIED FEMALE: ... happen.

(END VIDEO CLIP)

LAH: Then, after all of this, the police say she did manage to go to a gun range, Jake, where she practiced before walking into YouTube -- Jake.

TAPPER: All right, Kyung Lah, thank you so much.

Can you smell what the Rock is cooking for 2020? Dwayne Johnson talking about presidential rumors and how Trump has taught him a lesson.

Plus, fake cell phone towers and a plot to steal personal data, but it's what Homeland Security doesn't know that is the most alarming about this story.

Stick around.

(COMMERCIAL BREAK)

[16:45:00] JAKE TAPPER, CNN HOST: In our "POLITICS LEAD" today, Wisconsin's governor issuing a stark warning to his fellow Republicans about the mid-term elections coming this November. In his state supreme court race, the liberal candidate won by 12 points over the conservative choice, whom Governor Scott Walker backed. It's a result that hasn't happened in two decades. And now the Governor who is running for his third term this November is expressing his fear that this is just the beginning, tweeting, "tonight's results show we are at risk of a blue wave in Wisconsin. The far left is driven by anger and hatred. We must counter it with optimism and organization. Let's share our positive story with voters and win in November." Let's bring back the panel to talk about this and much else. Amanda Carpenter, the Republican on the panel, is there going to be a blue wave? Are you concerned?

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: Well, if you look at Alabama, Virginia, Pennsylvania, Wisconsin, yes, you can expect a blue wave. And obviously, Republicans are worried because Democratic enthusiasm is off the charts. But clearly, I don't think Republicans have they're messaging under control. Scott Walker's tweet this morning tweeting about the blue wave is almost like commercial for the blue wave. And I just have to say this is a complaint as a speech writer, a message person. You always have these politicians saying you need more optimism. Just saying optimism makes you optimistic, while at the same time you're saying the left is driven by hate and fear in their hearts. I mean, just demonizing the enemy isn't going to do it.

TAPPER: Well, it will get more people from the left out to vote.

CARPENTER: Yes, it might draw them up the enthusiasm on the wrong side of the isle which is what you're saying happening.

JACKIE KUCINICH, CNN POLITICAL ANALYST: It's like an ad. I mean, one of the things you're seeing, yes, Republicans are worried. There's an Arizona race to replace Trent Franks. Republicans are spending money there, a lot of money. That's a - that's a seat that is Republican, you know, through and through and yet they're worried about it because they know they can't lose another special election.

TAPPER: I want to change the subject quickly to the EPA Administrator Scott Pruitt is under fire for having rented -- for a number of things, but one is for having rented an apartment from the wife of an energy lobbyist who would obviously lobby his administration, agency for $50.00 a night. The White House was asked about this today. Why is the President OK with this and Sarah Sanders said "the President is not. We are reviewing the situation." Is Scott Pruitt in trouble?

KUCINICH: You know, this went from him, the President reportedly calling Scott Pruitt saying keep your head up, to we're reviewing the situation. And yesterday, he said, I think he's going to be OK or something to that effect. Yes, I feel like if the President calls you, you know you're in trouble. The other thing, the Daily Beast reported yesterday, Scott Pruitt also received campaign contributions for his A.G. race from this lobbyist and his wife. So this is one of the swampiest stories I think I've seen for an administration that has pledged to drain the swamp.

CARPENTER: Maybe he's just a bargain hunter.

TAPPER: $50.00 a night is --

SYMONE SANDERS, CNN POLITICAL COMMENTATOR: Maybe he wants to save his job on Fox News later on. TAPPER: -- is not -- $50.00 a night is not market value in here Washington, D.C. Symone, I wanted to ask you about The Rock, who a lot of people have been expressing hope that maybe he'll run for President. He was asked about whether or not he would run in an interview with Rolling Stone. He said, "I think in a lot of people's minds, what Trump has proved is that anybody can run for president. And in a lot of people's minds, what he's also proved is that not everybody should run for president. What I'm sensing now is that we have to pivot back to people who have deep-rooted knowledge about American History and politics and experience in policy and how laws get made. I think pivot has to happen." Ouch.

SANDERS: Ouch. So you know, can you smell what The Rock is cooking? Probably not a presidential run. You know, look, I think when The Rock is on a promotional tour, he has movie, The Rampage, it's coming out -- I think it's called The Rampage -- it's coming out next week. And so, I think -- there's a cnn.com article that says he is definitely going to be more vocal in this upcoming election. I think everyone with a platform from artist, from -- in artist, not necessarily entertainment, is I want my entertainers to entertain but I want my artists which are definitely more elevated. That's who Nina Simone is talking about when she said --

TAPPER: The Rock is an artist?

SANDERS: The Rock is, in fact, the artist one would argue. And Nina Simone said it's an artist's duty to reflect the time. And so, I hope folks at the platform get out there at the midterm and presidential elections and voice their opinions and hopefully that galvanizes more people to go to the polls.

TAPPER: Do you think The Rock could actually run? I mean, could he --

CARPENTER: Well, no, but it's always fun for people to get interested in politics. Maybe saying he doesn't want to run, people will walk into draft movement. We see this happen all the time. it will start a movement. But yes, getting involved, there's no downside to any politician, actor, musicians expressing interest in running because it always helps their brand.

TAPPER: And Jackie, what do you think?

KUCINICH: I mean, get more people out to vote. That's -- I mean, no matter what side you're on, you want -- if he joins Rock the Vote if he joins another group to try to --

SANDERS: Rock the vote?

KUCINICH: I didn't do that purpose, guys. It's always good to get more people out to the polls.

SANDERS: Absolutely.

TAPPER: All right, thanks, everyone. An alarming discovery, several spy devices disguised as cell phone towers discovered throughout Washington, D.C. but who put them there and what are they monitoring? That story next. But first, we're marking 50 years since the pivotal and horrific moments in American history, that was of course 50 years ago, the day Martin Luther King Jr. was shot to death at the balcony of the Lorraine Motel in Memphis, Tennessee. The crowd there now just heard a video message from the nation's first African-American president, Barack Obama. And before that, they heard Dr. King in his own words. An excerpt from his final speech entitled "I've been to the mountaintop" delivered 50 years last night, a powerful and eerily foreshadowing speech.

(BEGIN VIDEO CLIP)

[16:50:32] MARTIN LUTHER KING, JR., ACTIVIST: And I've seen the Promised Land. I may not get there with you but I want you to know tonight that we as a people will get to the promise land.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[16:55:00] TAPPER: Today's "BURIED LEAD," that's what we call stories we don't think are getting enough attention. An alarming revelation raising the questions about who might be spying on you. The Department of Homeland Security says it has found evidence of mobile snooping devices. These are tracking devices that act almost like mini cell phone towers. When cellphones connect, these devices can monitor the calls. Let's bring in CNN's Tom Foreman. So first of all, how many of these devices have they found?

TOM FOREMAN, CNN CORRESPONDENT: Here's the amazing part. None. But they think they've detected the electronic signature of these. Now, this thing started off sort of benignly. It does sound exactly like a spy novel. There was a request from Democratic Senator Ron Wyden saying, to Homeland Security, do you think any foreign government are using these devices called Stingrays to try listen in on cell phones in Washington, D.C. or track them? And all of a sudden Homeland Security came back and said, yes, we've actually detected the signature of somebody trying to use these things. So the obvious question is what is a Stingray? A Stingray is something that shows up in shows Homeland. It's about the size of a briefcase, extremely portable, you can carry it around and when you set it up, it acts like a cell tower.

TAPPER: So it picks up the calls, it detects and can you listen in on the calls?

FOREMAN: It not only does that but what it does is it sort of triangulates your phone. There are very different varieties of things out there. So it's going to locate your phone. So that means it has located you and it knows who you're reaching out to and who you're talking to. And we actually reached out to a counter-espionage expert. His name is Kevin Murray and he had this to say about what this things can do and why there are worry.

(BEGIN VIDEO CLIP) KEVIN MURRAY, COUNTER ESPIONAGE EXPERT: In Washington, D.C., and actually any capital city, this is very problematic. These things have the capability of tracking. So if you want to pick a person and say, let's see where they go and who they talk to during the day, that might give you just enough intelligence to make some decisions without even doing the eavesdropping. But if the person is careless enough to make phone calls and discuss secrets over the phone, that's a real problem, especially on a government level.

(END VIDEO CLIP)

FOREMAN: Well, as you might guess, the ACLU is not happy about these devices in general. They said that more than 25 states, there are various Police Departments that have this things and they keep it very secretive. The company that makes them is very secretive about exactly what these devices can do, how much they can spy on you. But this is the amazing part. For everything we've heard about this from Homeland Security, they're not tipping their hand at all about who they think might actually be operating these in this town and what they're using them for. They've just confirmed yes, we think people are cruising around here doing that which is one of the reasons why as you know the nation's capital is also been known as the spy capital of the world. So I guess we'll have to find out if anything is going on with this. But the mere confirmation that they're out there is setting off alarm bells.

TAPPER: Astounding story. All right, Tom Foreman, thank you so much. I want to bring back my panel. I have two questions for you. The first one is about Scott Pruitt because he talked at Fox News earlier today defending himself after a different controversy. This one about the damaging information that he gave pay raises to who of his staffers even -- two of his staffers that he brought with him from Oklahoma, even though White House said it was not OK to give them these raises. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If you're committed to the Trump agenda, why did you go around the President and the White House to give raises to two staffers?

SCOTT PRUITT, ADMINISTRATOR, EPA: I did not. My staff did and I found about out about that yesterday and I changed it. PPO process should have been respected and I issued a statement yesterday walking back those pay raises that should --

UNIDENTIFIED MALE: Is that something to be fired from?

PRUITT: -- that should not have been done.

UNIDENTIFIED MALE: So who did it?

PRUITT: And there will be some accountability.

UNIDENTIFIED MALE: A career person or a political person?

PRUITT: I don't know.

UNIDENTIFIED MALE: You don't know? You don't know anything. You don't who know did it?

PRUITT: I found out about this yesterday and I corrected the action. So we are in the process of finding out how it took place and correcting it.

(END VIDEO CLIP)

TAPPER: Amanda?

CARPENTER: This has seems to be a considerable lack of ethics not only with Scott Pruitt but agent or cabinet wise. You have the problems with lodging, you have the problems with pay raised, you have the problems with security clearances and also the flights that extends to outside Scott Pruitt. And so, a lot of conservatives are coming to his defense right now saying he is under fire from the left. There's no coincidence of all these stories are happening now. That could be true if people think that he is vulnerable and want to knock him off because they don't like his regulatory agenda, but at the same time he's giving them such an easy opening as so many other White House officials do that I just don't understand why they can't tighten things up.

TAPPER: All right. Thanks, everyone for being here. I really appreciate it. That's it for THE LEAD. I turn you over now to Wolf Blitzer, he's right next door in "THE SITUATION ROOM." Thanks for watching.